Use it for agent prompts
Convert each checklist row into explicit agent instructions: setup, invalidation, size limit, skip condition, and required journal note. This makes the paper agent easier to inspect later.
Template
Pre-trade checklist template
Use this checklist before a paper trade or agent decision to make sure the thesis, invalidation, sizing, and risk controls are explicit.
| Check | Question | Answer before acting |
|---|---|---|
| Thesis | What specific setup is this trade practicing? | Write the catalyst, pattern, or rule. |
| Invalidation | What would prove the thesis wrong? | Define stop, condition, or time-based exit. |
| Size | What is the maximum paper position size? | Keep it inside the agent risk limits. |
| Drawdown | How much adverse movement is acceptable? | Compare with max drawdown and daily loss rules. |
| Review | What will be reviewed after exit? | Decision rationale, result, rule fit, and mistake pattern. |
Trading Boy workflow
Turn this checklist into a persona rule, run the agent in paper mode, and review the decision trail before changing the rules.
How to use the checklist before a paper trade
A pre-trade checklist is useful because it slows the workflow down before the paper decision is recorded. For an AI paper trading agent, the checklist gives the system a clear frame: what setup is being practiced, what would make the setup invalid, how much simulated risk is allowed, and what evidence will be reviewed after the trade closes.
Use the checklist before the entry rather than after the outcome is known. If the thesis is written after the trade wins or loses, the review will be biased. Trading Boy pages connect this template to trade entry checklist, position sizing, paper trading journal template, and risk review so the paper trade can be checked from multiple angles before the agent acts.
The checklist should also define what will not be changed. For example, if the paper trade is testing an entry filter, do not also change the position size, exit rule, and market universe in the same sample. Keeping the test narrow makes the next review much clearer. If the trade fails, you can identify whether the setup was poor, the invalidation was too loose, or the sample simply needs more evidence.
For discretionary traders, the checklist is a guard against impulse. For agent builders, it is a guard against vague prompts. In both cases, the practical benefit is the same: each paper decision becomes easier to audit because the expected behavior was written before the outcome.
Example completed checklist
Thesis: The paper agent is testing a breakout continuation rule after consolidation. The trade is only valid if volume expands and the entry remains above the prior range.
Invalidation: The setup is invalid if price closes back inside the range or if the broader market moves sharply against the watchlist. The agent must record the invalidation before logging the entry.
Risk: The simulated position must stay inside the written paper risk limit. If the stop distance requires too much size reduction, the agent should skip the trade instead of forcing a poor setup.
Review question: After exit, the trader will ask whether the agent waited for confirmation or acted early. That single question keeps the post-trade review focused.
Use it for manual review
When a human enters a paper idea manually, the same checklist prevents hindsight. The written rule becomes the reference point for the later review.
Checklist cadence
Use the checklist every time the workflow changes, not only when the market feels uncertain. A paper agent with a new watchlist, new setup definition, new size rule, or new alert condition should be treated as a new test that deserves a written pre-trade frame.
For high-frequency paper agents, the checklist can be converted into required fields rather than filled out manually for every decision. The important point is that the agent cannot log a complete simulated trade unless thesis, invalidation, size, and review question are present.
For lower-frequency discretionary paper trades, write the checklist in plain language. If the trade cannot be explained without jargon, the later review will struggle to decide whether the outcome came from a real rule or from an improvised idea.
If the checklist blocks a paper trade, treat that as useful output. A skipped simulated entry can be evidence that the rule protected the workflow from an unclear setup.
Pre-trade checklist FAQ
What belongs in a pre-trade checklist?
Include thesis, setup, invalidation, entry condition, size, maximum paper risk, drawdown context, and the review question for after the trade closes.
Should an AI paper trading agent use a checklist?
Yes. It makes the agent's intended behavior explicit before the simulated decision, which makes later journal review more reliable.
Is this checklist financial advice?
No. It is an educational workflow tool for paper-trading review and does not recommend live trades.